Thursday, October 13, 2011

What we can learn from Walmart

Walmart's reach into the US economy is so deep that at times I think they have better economic data than the random stats compiled in Washington.  Case in point comes from today's investor presentation which included the following chart....

We only see percentage shifts so it's unclear if the swaps are dollar for dollar but the trend is apparent.  People are swapping out of branded goods for Walmart's store brand - Great Value - and they are buying smaller unit sizes because the prices are lower (even though unit prices are likely higher).

As a data junkie with no fantasy football to occupy me this fall, I could spend hours pouring over Walmart's sales data to get my fix :)

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Google absolutely crushed their earnings this quarter again.  I remain continuously perplexed by the google phenomena.  I love Google and use their products throughout the day but I've never clicked a paid ad so they've never made a dime off me.  However, we can get a little clarity on how they are growing so fast by looking at some specifics from their press release:

Google's tax rate sits at just 19% now as they generate 55% of their revenues overseas.  They have implemented a fairly complex tax strategy that funnels revenues through Ireland and Netherlands to Bermuda which has cut their taxes by over $3 billion in recent years (and contributes to their continued expansion of their earnings).

The stock is up $35 or so right now so we'll see if it pulls the rest of the market along for the ride.  Everyone seems to have forgotten JP Morgan and Alcoa already :)

Cheers!

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